Market Barometer

The stock market has as much influence on my daily life as baseball. -- Pug Mahoney

   When things go well, politicians take credit for it. When things falter, they blame the other guy.
  As for the stock market being a barometer of the economy, it's more like a thermometer, measuring a current fever and irrational exuberance for higher stock prices.
   A reality is that very few people actually own stock. The rest of the workers in America are more concerned with having a job and whether their next wage increase will come through as expected.
   None of that, however, changes the practice of politicians claiming credit for economic progress, even when it started long before they took office and momentum continued well into their first few months.
   It's as if the entire economy turned on a dime at noon on January 20, when the oath of office was taken. At least, that's what they would like people to think.
   The reality is that the American economy began its recovery trend nine years ago. Economic data markers are released quarterly for Gross Domestic Product (GDP), the key measure of national performance, and monthly for things like job growth and unemployment ratios.
   So a GDP measure would cover a three-month period ending December 31, and an early estimate would not be released until mid-January, before a presidential inauguration. Likewise with employment figures; there is a delay, and the numbers reflect performance before a political change takes place.
   In addition, the federal government's fiscal year begins October 1, so a new president is stuck with a budget set up by a predecessor, and is therefore one that he cannot take credit for.
   Those realities, however, seldom stop a politician from claiming credit for improvements, and blaming someone else for failures.
   Then there is the candidate who complains about a poorly performing economy, and proclaims, "Only I can fix it." Soon after taking office, however, he laments that he "inherited a mess," and blames his predecessor rather than trying to fulfill his promise to fix things.
   In addition, there is the kind of guy who says, "Who knew that this stuff could be so complicated?"
   Actually, many people, ranging from economic professors to auto mechanics, actually did know.
   And if you didn't know, you should not have run for office, claiming that you did.
   Here are a few numbers: U.S. employers added 209,000 jobs in June, as the national economy entered its ninth year of recovery. The unemployment rate ticked down to 4.3 percent. Separately, the nation's international trade deficit declined in June, as exports rose and imports decreased.
   Overall, the economy grew by 2.6 percent in the second quarter, up from 1.2 percent in the first three months of the year. All these numbers are part of a trend that been on the upswing for many months.
   So how complicated can it be? The numbers are readily available online from government agencies who have been tracking economic performance for decades, and whose professional employees are immune to political influence.
   No matter how you try, there is no way a new president can truthfully claim credit for a rising economy in his first few months in office (even Franklin Roosevelt's efforts took a year to show some progress), especially if there has been no emergency spending to stimulate construction and employment. But with an unemployment rate of 4.3 percent, the lowest in years, that means there's a shortage of workers.
   A new president can, however, wreck economic progress, and one way to do that is to cut immigration in half and prevent workers from coming to America in search of jobs.
   But the numbers will not show that until the next fiscal quarter or later, and by then a downward spiral toward economic recession may well have started.